Legislative Update from Rep. Rick Rand April 18, 2016

April 20, 2016

FRANKFORT – For more than a decade now, the most pressing long-term problem in Kentucky has been the growing liabilities of our public retirement systems for teachers and state employees.
Both systems had far more than they needed a dozen or so years ago, but two recessions since then have swept most of those gains away.
While the systems are able to pay monthly benefits, they are still having to sell assets, making it tougher for their other investments to compensate. This trend could be catastrophic in a decade or two if we don’t act now.
On Friday, the General Assembly acted, taking a major step toward permanently addressing this potential crisis by overwhelmingly approving a state budget that provides significantly more funding over the next two years. This spending plan doesn’t fix the problem entirely, but it certainly puts us on the right course.
While the governor, the House and the Senate agreed from the outset to make a pension fix the chief hallmark of the budget, there was considerable debate about where the money should come from. All sides agreed to use much of the state’s expected revenue growth over the next two years, and we also supported the governor’s plan to cut some portions of government by nearly 10 percent while protecting K-12 classrooms, critical health and human services like Medicaid and public-safety programs.
The House disagreed, however, with the governor’s and Senate’s plans to cut higher education and such other educational support programs as family resource and youth services centers. The House budget showed that there was more than enough money to fund the retirement systems without harming any student.
The House was successful in advocating for our schools, which will not see any program cut in this budget, and we were able to reduce by half the governor’s original funding reduction for higher education. Our college and university presidents said they could absorb that amount, so we agreed to the compromise. There is still a legal question whether the governor can cut our colleges and universities this fiscal year – we in the House don’t think so – but that is now a matter for the courts to decide.
In addition to this money, we set aside about $125 million in a separate fund that will depend on the outcome of a performance audit at the two retirement systems. This money will go to those areas where we determine the need is greatest.
This budget will be remembered for the foundation it provides for our public retirement systems, but there are many other highlights in it as well.
I’m especially proud that the House was successful in approving its “Work Ready” scholarship program for graduating high school seniors attending college in the fall. This is designed to provide “the last dollar in,” so that the students pursuing a two-year degree don’t have to pay tuition.
The amount will depend on how much an incoming college student receives in grants or scholarships like KEES, which they earn with good grades in high school. The scholarship can then be used at any public or independent college or university in the commonwealth that offers associate degrees.
The college student will need to take at least 15 hours a semester and maintain a 2.5 GPA. Funding will be available for four out of six semesters, giving students some leeway in finishing their degree.
Other educational advances in the budget include increasing preschool eligibility from 160 percent of the federal poverty level to 200 percent, a move that will help thousands of young children.
For older students, we increased funding for a dual-credit program that helps high school students obtain college credit. This will help many districts that have difficulty paying for this. We also ensure all state lottery proceeds go toward education, including the CAP/KTG programs many depend on to attend college.
Some of the other positives in the budget include:

· A plan to return more coal severance dollars to the coal counties, to help with declines they’re facing as a result of the downturn in the industry.
· $100 million in bonds that will go toward workforce-training projects across the commonwealth.
· Millions of dollars that will go to our state parks for critical repairs.
· Raises for Kentucky State Police troopers.
· Money that is set aside to help renovate the Lexington Convention Center and improve waterfront developments in Louisville and Northern Kentucky.

Although the budget is complete, it must still be reviewed by the governor, who can choose to sign or reject it or remove portions through a line-item veto. He will have about 10 days to make that decision, but our hope is that he will retain all of the new programs I have mentioned.
I want to thank everyone who contacted me this year to let me know their views and concerns. Our time passing laws may be over, but it is never too late to let me know what you think.
My address is address is Room 366B, Capitol Annex, 702 Capitol Avenue, Frankfort, KY 40601; or you can email me at Rick.Rand@lrc.ky.gov.
To leave a message for me or for any legislator by phone, please call 800-372-7181. For those with a hearing impairment, the number is 800-896-0305.
I hope to hear from you soon.